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Posts Tagged ‘SunPower’

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photo: WorldWater & Solar Technologies

As the financial crisis short-circuits the ambitions of green tech companies, solar financier MMA Renewable Ventures is pushing ahead with raising its fifth fund. Meanwhile, its solar power plant joint venture with Chinese solar cell maker Suntech – Gemini Solar Development – has been selected by utility Austin Energy to build a 30-megawatt solar farm in Texas.

The San Francisco-based firm just completed its $200 million Solar Fund III, which invested in 20.6 megawatts of photovoltaic solar arrays for companies like Macy’s, the Gap, Lowe’s and utility FPL (FPL) as well as the Denver International Airport. MMA Renewable (MMAB.PK) provides the financing for the installation of large commercial solar arrays on big box stores and other locations while retaining ownership of the systems. The electricity produced is sold to the building owner under a long-term contract.

“The good news is that we can raise another fund in a tough market,” MMA Renewable Ventures CEO Matt Cheney told Green Wombat, adding that the company aims to raise $200 million or more for Solar Fund V.

That doesn’t mean it’ll be easy. Many of the Wall Street banks that invested in big solar systems are no more and demand for the tax credits generated by the projects has fallen faster than the Dow Jones as most companies aren’t piling up much tax liability these days.

“The ones that are left are being very picky and asking a lot,” says Cheney, adding that banks and other investors are demanding higher returns on their investments. Still, he notes, past MMA Renewable investors like Wells Fargo (WFC) remain relatively healthy. “If you look at every country in Europe and the U.S., there are good examples of financing institutions that were less impacted by the financial crisis, which is a deep one,” he says.

One possible source of new tax-equity investment may come from well-capitalized utilities that, thanks to a change to the tax laws Congress made last October, can now claim tax credits for solar projects. PG&E (PCG) CEO Peter Darbee, for instance, has said his utility plans to invest in solar power plants.

A new and potentially bigger worry is whether MMA Renewable customers – big box retailers and the like – will be survive the financial crisis. MMA Renewable’s business is built on long-term power purchase contracts – as long as 20 years – that provide a predictable and steady revenue stream to investors.

“Would you buy a corporate bond from a large U.S. company that went out 20 years today?” Cheney asks. “You would most likely tell me that’s a long time. You don’t know if you want to take that risk beyond five or ten years. That’s the equation that’s present in the marketplace today.”

In California, at least, demand for solar has remained strong: This week state regulators reported that installed solar systems more than doubled in 2008 from the previous year.

One bright spot may be the market for smaller-scale photovoltaic power plants and MMA Renewable’s Gemini joint venture with Suntech (STP).  The Austin Energy project still must be approved by the city of Austin, but Cheney says Gemini is in the midst of negotiations with other utilities as well.

When SunPower (SPWRA) reported record fourth-quarter earnings Thursday, CEO Tom Werner said the Silicon Valley solar cell maker was shifting resources to its power plant building business in 2009 and had 1,000 megawatts of projects on the drawing boards.

There was just one catch:  money. “We have a strong pipeline of projects fully permitted, or with permits in process, that will be buildable,” Werner said, ” when financing becomes available.”

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Amid the daily drumbeat of mass layoffs, here’s some sunny news: Solar startup Suniva cut the ribbon Thursday on a photovoltaic cell factory outside Atlanta.

As solar factories go, Suniva’s plant – the first such facility in the Southeast – is relatively small, making 32 megawatts of solar cells annually until  production is fully ramped up to 175 megawatts in 2010. But the factory will create 100 green collar jobs and it follows the opening of  SolarWorld’s new solar cell fab outside Portland, Ore., that will  produce 500 megawatts’ worth of solar cells, and thin-film solar startup HelioVolt’s factory in Austin. Meanwhile, Solyndra, a Silicon Valley thin-film solar startup, is expanding its production facilities while Bay Area rival OptiSolar is building a Sacramento factory that will employ 1,000 workers to produce solar cells for the power plant the company is building for utility PG&E (PCG). (Leading thin-film solar company First Solar (FSLR) operates a factory in Ohio as well as plants in Malaysia.) But Chinese solar giant Suntech (STP) last week said it has put plans for U.S. factories on hold due to the credit crunch.

The Suniva grand opening comes on a good news-bad news day for the solar industry. On one hand, President-elect Barack Obama is expected to nominate alternative energy proponent and Nobel laureate Steven Chu, director of the Lawrence Berkeley National Laboratory, as Secretary of Energy. But the solar industry faces a tough year ahead. On Thursday, research firm New Energy Finance, echoing other analysts, predicted prices for polysilicon – the base material of conventional solar cells – would fall 30% in 2009. That’s bad news for conventional solar cell makers like SunPower (SPWRA) and Suntech if they’ve locked in silicon supplies at higher prices but provides an opening for further growth for thin-film solar companies that make solar cells that use little or no polysilicon.

“We expect to see significant drops in the price of modules next year,” wrote New Energy Finance CEO Michael Liebreich.  “Any manufacturer who does not have access to cheap silicon and who has not focused on manufacturing costs is going to be in trouble. The big shake-out is about to begin. The next two years will change the economics of PV electricity out of recognition.”

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solarcells

photo: Southern California Edison

While demand for solar panels is expected to continue to grow by double-digits in the years ahead, 2009 could be a make-or-break year for some companies, according to an analysis from HSBC Global Research.

After grappling with a shortage of polysilicon – the base material of conventional solar cells – for the past couple years, the industry now faces falling prices. The spot market for polysilicon has plummeted 35% since October, writes HSBC alternative energy analyst Christine Wang, who predicts prices will fall 30% next year.

That’s bad news for solar module makers who locked in long-term contracts at higher prices – which looked like a smart move when polysilicon was in short supply and prices rising rapidly. “The winners will likely be the companies with competitive cost structures, scale, good product  quality, strong balance sheets, and strong customer relationships,” according to Wang. “We believe that new entrants and small players will suffer the most as they lack brand recognition.”

The culprits are the usual suspects – the global financial crisis as well as some cutbacks in subsidies from countries like Spain. Solar cell companies that have rapidly ramped up production over the past two years now may be saddled with too many high-priced products.

Wang downgraded Chinese solar giant Suntech (STP) and set a price target of $4.50 – down sharply from HSBC’s earlier target of $55. Suntech was trading at near $10 Monday afternoon but still nearly 90% off its 2008 high.  (SunPower (SPWRA), First Solar (FSLR) and other solar cell makers have also seen their share prices nose-dive.) “High portion of polysilicon based on contract prices will hurt Suntech,” writes Wang, who estimated that 80% of Suntech’s polysilicon supply is locked into contracts “on less favorable fixed prices.”

Falling panel prices is good news for solar system installers like Sungevity and Akeena Solar (AKNS) and their residential and commercial customers. When Green Wombat ran into Akeena CEO Barry Cinnamon in San Francisco at the announcement of Better Place’s Bay Area electric car project, he said he was in no rush to enter into long-term contracts with solar cell suppliers as he expects prices will continue to fall in 2009.

Still, not all the news is gloomy for the industry. Wang expects that the financial crisis won’t derail government support for solar, given climate change pressures and state mandates to increase the use of renewable energy. The move by utilities like PG&E (PCG) and Southern California Edison (EIX) to sign long-term contracts for electricity from photovoltaic power plants will also keep demand high in coming years.

Wang projects solar cell demand will grow 45% between 2008 and 2012. “Developed countries are increasingly focused on environmental protection and curtailing the causes of climate change, and we do not believe this trend will shift just because of a (hopefully) short-term financial crisis,” she wrote.

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photos: SolarWorld

HILLSBORO, Ore. – A solar cell factory has sprouted in Oregon’s Silicon Forest amid the region’s old-growth semiconductor plants. And who is providing these well-paid, high-tech green jobs, investing in America rather than fleeing to Asia to set up shop? The Germans.

Bonn-based SolarWorld AG on Friday officially flips the switch on the United States’ largest solar cell plant. (See the Fortune video here.) The company, the world’s fifth largest solar cell manufacturer, has recycled a former Komatsu factory built to produce silicon wafers for the chip industry  Last week, SolarWorld America president Boris Klebensberger gave Green Wombat a sneak peak at the new Hillsboro plant and talked about why a German company, whose domestic solar market is the planet’s largest, is pursuing a made-in-America strategy. (SolarWorld’s German rival Solon AG, meanwhile, on Friday opened a smaller solar module plant in Tucson, Ariz.)

“I know a lot of people will say, ‘You idiot, Boris. You can’t manufacture in the U.S.,’ ” says Klebensberger, 39, who sports a hoop earring and has a penchant for saying what’s on his mind.

That has been the conventional wisdom. While thin-film solar companies like First Solar (FSLR), Solyndra and Energy Conversion Devices (ENER) have built factories in the U.S., traditional silicon-based module makers such as SunPower (SPWRA) have outsourced production overseas.

But SolarWorld is counting on its expertise in manufacturing in high-cost Germany and its new American branding to give it a competitive advantage. “Made in America is a very big selling point,” says SolarWorld marketing director Anne Schneider. “Customers like that.”

Like other solar cell makers, SolarWorld is trying to build a brand around an increasingly commoditized product. “Even in a commodity business this is a brand,” says Klebensberger. “If you have to choose between two products that are technologically the same,  you’ll probably choose the one made in the U.S.”

SolarWorld jumped into the U.S. market in 2006 when it acquired Royal Dutch Shell’s solar cell factory in Camarillo, Calif., and a silicon ingot plant in Vancouver, Wash. “This was an opportunity for SolarWorld to establish itself in the U.S. market very quickly and get an employee base,” says Klebensberger, who also serves as COO of SolarWorld’s global operations.

The company was founded in 1998 by, as Klebensberger puts it, “five crazy guys who people thought were on drugs” when they said they were going into the solar business. (Klebensberger was employee No. 7.) But Germany’s lucrative incentives for renewable energy quickly turned the nation into a solar powerhouse and SolarWorld went public in 1999. Revenues – $931 million last year – have been growing around 30%-40% annually and the company has a market cap of $3.1 billion.

SolarWorld saw a potentially huge opportunity in the U.S. but the Shell plant was relatively small – producing 80 megawatts of solar cells annually – so Klebensberger went shopping for a new factory. He ruled out California – too expensive – before settling on Hillsboro, 20 miles west of Portland.

The cost of living was reasonable – at least compared to California – and Oregon is on the forefront of promoting sustainability and the green economy. And just as importantly, Intel (INTC) and other chip companies had opened semiconductor factories, or fabs, in the area in the 1980s and ’90s. “A lot of our workforce came from established chip companies or those that closed their fabs,” says Klebensberger, sipping tea from a coffee cup emblazoned with “Got Silicon?”

“The manufacturing and product is different but the raw starting material is the same and there’s a lot of similarity in the equipment,” adds Gordon Bisner, vice president of operations and a chip industry veteran. “There’s a lot of the same skill sets from a maintenance and engineering standpoint and understanding the basic manufacturing principles and what it takes to manufacture a product successfully in the United States.”

Klebensberger’s team found an old Komatsu silicon wafer fab that had stood empty for years. They bought the 480,000-square foot building for $40 million last year and began retrofitting it. “We needed a quick ramp-up,” says Klebensberger. “This business is all about speed.”

The retrofit took about 15 months – though the minimalist gray industrial decor of the Komatsu era remains. When fully built out in a couple of years, the plant will produce 500 megawatts’ worth of solar cells annually and employ 1,400 workers. In the meantime, the target is 100 megawatts by the end of 2008, and 250 megawatts in 2009.

In one corner of the building, a room of steel vats cook up polysilicon, producing eight-foot-long silicon ingots in the shape of giant silver pencils. Those ingots are taken to another room where wiresaw machines slice them into wafers. The wafers then travel down a conveyor belt where robots wash them and scan for imperfections.

“What’s critical here is the equipment,” says Bisner over the hum of the machines. “Our competitive advantage is how we use the equipment, how can we get every little bit of photovoltaic cell out of the end of the line. It takes equipment, it takes technology and it takes people too.”

In an adjoining room, the wafers are imprinted with contacts and transformed into photovoltaic cells. Depending on customer demand, SolarWorld will sell both silicon wafers and finished cells. The company currently gets 10% to 15% of its revenues from the U.S.

SolarWorld isn’t the only solar company wanting a made-in-America label. Sanyo this week announced it will build a solar cell factory in Salem, south of Portland. And Chinese solar giant Suntech (STP) earlier this month acquired a California-based solar installer and announced a joint venture with San Francisco-based MMA Renewable Ventures (MMA) to build solar power plants. Suntech chief strategy officer Steven Chan told Green Wombat this week that Suntech will likely open factories in the U.S. within a couple years.

Says Klebensberger, “We provide green jobs. We’re not just talking about it, we’re doing it.”

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photo: eSolar

After months of failed attempts in Congress to extend crucial renewable energy tax credits, the end-game came with lightning speed Friday afternoon: The House of Representatives passed the green incentives attached to the financial bailout package approved by the Senate Wednesday night and President Bush promptly signed the legislation into law.

There were goodies for wind, geothermal and alternative fuels, but the big winner by far was the solar industry.

“It feels like we should be popping the champagne,” said a Silicon Valley solar exec Green Wombat met for lunch minutes after Bush put pen to paper.

That it took the biggest financial crisis since the Great Depression to save billions of dollars of renewable projects in the pipeline for the sake of political expediency does not bode well for a national alternative energy policy. But the bottom line is that the legislation passed Friday sets the stage for a potential solar boom.

  • The 30% solar investment tax credit has been extended to 2016, giving solar startups, utilities and financiers the certainty they need for the years’ long slog it takes to get large-scale power plants and other projects online. The extension is particularly important to those Big Solar projects that need to arrange project financing in the next year or so.
  • The $2,000 tax credit limit for residential solar systems has been lifted, meaning that homeowners can get a 30% tax credit on the solar panels they install after Dec. 31. That will save a bundle – especially for those who live in states with generous state rebates – and goose demand for solar panel makers and installers like SunPower (SPWRA) and First Solar (FSLR). (If you buy a $24,000 3-kilowatt solar array in California – big enough to power the average home –  you can claim a $7,200 federal tax credit. Add in the state solar rebate and the cost of the system is cut in half.)
  • Utilities like PG&E (PCG), Southern California Edison (EIX) and FPL (FPL) can now themselves claim the 30% investment tax credit for large-scale solar power projects. That should encourage those well-capitalized utilities to build their own solar power plants rather than just sign power purchase agreements with startups like Ausra and BrightSource Energy.

“The brakes are off,” says Danny Kennedy, co-founder of Sungevity, a Berkeley, Calif., solar installer that uses imaging technology to remotely size and design solar arrays. “In just six months since our launch we’ve sold about a hundred systems. With an uncapped tax credit for homeowners going solar, we expect business to boom.”

While elated sound bites from solar executives have been flooding the inbox all afternoon – along with invites to celebratory after-work drinks – solar stocks took a drubbing (along with the rest of the still-spooked market) after initially soaring on the news.

SunPower ended the trading day down 5% while First Solar shares dropped 8%. The bright spot was China’s Suntech (STP), which on Thursday announced a joint venture with financier MMA Renewable Ventures to build solar power plants as well as the acquisition of California-based solar panel installer EI Solutions.

Congress didn’t treat the wind industry so generously. The production tax credit for generating renewable energy was extended by just one year, guaranteeing the industry’s will continue to live year by year (at least through 2009). But given that 30% of all new power generation built in the United States in 2007 was wind, and that the amount of wind power installed by the end of 2008 is expected to rise 60% over the record set last year, the wind biz should do just fine.

But Congress did give a break to those who buy small-scale wind turbines. Systems under 100 kilowatts qualify for a 30% tax credit up to $4,000. Homeowners get a $1,000 tax credit for each kilowatt of wind they install, though the credit is capped at $4,000.

“This is a huge breakthrough for small wind,” says Scott Weinbrandt, president of Helix Wind, a San Diego-based manufacturer of 2-and-4-kilowatt turbines.

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In another sign that the financial crisis is not slowing the solar industry, Suntech, the giant Chinese solar module maker, made a big move into the United States market on Thursday. The company announced a joint venure with green energy financier MMA Renewable Ventures to build solar power plants and said it would acquire California-based solar installer EI Solutions.

Founded in 2001, Suntech (STP) recently overtook its Japanese and German rivals to become the world’s largest solar cell producer. The company has focused on the lucrative European market and only opened a U.S. outpost, in San Francisco, last year.  The joint venture with MMA Renewable Ventures (MMA) – called Gemini Solar – will build photovoltaic power plants bigger than 10 megawatts.

Most solar panels are produced for commercial and residential rooftops, but in recent months utilities have been signing deals for massive megawatt photovoltaic power plants. Silicon Valley’s SunPower (SPWRA) is building a 250-megawatt PV power station for PG&E (PCG) while Bay Area startup OptiSolar inked a contract with the San Francisco-based utility for a 550-megawatt thin-film solar power plant. First Solar (FSLR), a Tempe, Ariz.-based thin-film company, has contracts with Southern California Edision (EIX) and Sempre to build smaller-scale solar power plants.

Suntech’s purchase of EI Solutions gives it entree into the growing market for commercial rooftop solar systems. EI has installed large solar arrays for Google, Disney, Sony and other corporations.

“Suntech views the long-term prospects for the U.S. solar market as excellent and growing,” said Suntech CEO  Zhengrong Shi in a statement.

Other overseas investors seem to share that sentiment, credit crunch or not.  On Wednesday, Canadian, Australian and British investors lead a $60.6 million round of funding for Silicon Valley solar power plant builder Ausra. “So far the equity market for renewable energy has not been affected by the financial crisis,” Ausra CEO Bob Fishman told Green Wombat.

The solar industry got more good news Wednesday night when the U.S. Senate passed a bailout bill that included extensions of crucial renewable energy investment and production tax credits that were set to expire at the end of the year.

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photo: Todd Woody

Green Wombat’s story in the new issue of Fortune magazine on the solar power plant-fueled boom in demand for wildlife biologists is now online here. The photo above of the blunt-nosed leopard lizard was taken at a state reserve in San Luis Obispo County.

Or you can read the story below.

The hottest tech job in America

Giant solar plants are being built where dozens of protected species live. That’s good news for wildlife biologists.

By Todd Woody, senior editor

(Fortune Magazine) — It looks like a scene from an old episode of The X-Files: As a red-tailed hawk circles overhead and a wild pronghorn sheep grazes in the distance, a dozen people in dark sunglasses move methodically through a vast field of golden barley, eyes fixed to the ground, GPS devices in hand. They’re searching for bodies.

In this case, however, the bodies belong to the endangered blunt-nosed leopard lizard, and the crew moving through the knee-high grain are wildlife biologists hired by Ausra, a Silicon Valley startup that’s building a solar power plant for utility PG&E on this square mile of central California ranchland.

With scores of solar power stations planned for sites in the Southwest, demand for wildlife biologists is hot. They’re needed to look for lizards and other threatened fauna and flora, to draw up habitat-protection plans, and to comply with endangered-species laws to ensure that a desert tortoise or a kit fox won’t be inadvertently squashed by a solar array.

That has engineering giants like URS (URS, Fortune 500) in San Francisco and CH2MHill of Englewood, Colo., scrambling to hire biologists to serve their burgeoning roster of solar clients. “It’s a good time to be a biologist – it’s never been busier in my 15 years in the business,” says Angela Leiba, a senior project manager for URS, which is staffing the $550 million Ausra project. URS has brought onboard 40 biologists since 2007 to keep up with the solar boom. Salaries in the industry, which typically start around $30,000 and run up to about $120,000, have spiked 15% to 20% over the past year.

The work is labor-intensive. “It can take a 30- to 50-person team several weeks to complete just one wildlife survey,” says CH2MHill VP David Stein.

The economics of Big Solar ensure that wildlife biology will be a growth field for years to come. For one thing, there’s the mind-boggling scale of solar power plants. Adjacent to the Ausra project in San Luis Obispo County, for instance, OptiSolar of Hayward, Calif., is building a solar farm for PG&E that will cover 9 1/2 square miles with solar panels. Nearby, SunPower of San Jose will do the same on 3.4 square miles. Every acre must be scoured for signs of “species of special concern” during each phase of each project.

That adds up to a lot of bodies on the ground. URS, for instance, has dispatched 75 biologists to Southern California where Stirling Energy Systems of Phoenix is planting 12,000 solar dishes in the desert. “The biologists are critical to move these projects forward,” notes Stirling COO Bruce Osborn. For one project Stirling had to pay for two years’ worth of wildlife surveys before satisfying regulators.

Just about every solar site is classified as potential habitat for a host of protected species whose homes could be destroyed by a gargantuan power station. (Developers of California solar power plants, for example, have been ordered to capture and move desert tortoises out of harm’s way.) The only way to determine if a site is crawling with critters is to conduct surveys.

While that means a lot of jobs for wildlife biologists, it’s not all red-tailed hawks and pronghorn sheep for these nature boys and girls. The work can get a bit Groundhog Dayish, say, after spending 1,400 hours plodding through the same barley field in 90-degree heat in search of the same blunt-nosed leopard lizard. No wonder then when URS crew boss Theresa Miller asks for volunteers to reconnoiter a decrepit farmhouse for some protected bats on the Ausra site, hands shoot up like schoolchildren offered the chance to take the attendance to the principal’s office.

PG&E (PCG, Fortune 500) renewable-energy executive Hal La Flash worries that universities aren’t cranking out enough workers of all stripes for the green economy. “It could really slow down some of these big solar projects,” he says. Osborn can vouch for that: Biological work on the Stirling project has ground to a halt at times while the company waits for its consultants to finish up surveys on competitors’ sites.

For the young graduate, veteran biologist Thomas Egan wants to say just three words to you: Mohave ground squirrel. The rare desert dweller is so elusive that the only way to detect it on a solar site is to set traps and bag it. “There’s a limited number of people authorized to do trapping for Mohave ground squirrels,” says Egan, a senior ecologist with AMEC Earth & Environmental. “If you can work with the Mohave ground squirrel, demand is intense.”

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